SUMMARY COMPENSATION TABLE
The table below summarizes the total compensation earned by each of the Companys NEOs for the year ended December 31, 2007.
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Name and
Principal Position
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|
Year
|
|
Salary
(1)
|
|
Bonus
|
|
Stock
Awards
(2)
|
|
Option
Awards
(3)
|
|
Non-Equity
Incentive Plan
Compensation
(4)
|
|
Change in
Pension
Value
and Non-qualified
Deferred
Compensation
Earnings
(5)
|
|
All Other
Compensation
(6)
|
|
Total
|
Dustan E.
McCoy
Chairman and Chief Executive Officer
|
|
2007
2006
|
|
$
|
876,077
800,000
|
|
$
|
|
|
$
|
662,476
814,173
|
|
$
|
911,118
636,321
|
|
$
|
483,600
328,000
|
|
$
|
121,257
94,034
|
|
$
|
344,272
894,265
|
|
$
|
3,398,800
3,566,793
|
|
|
|
|
|
|
|
|
|
|
Patrick C. Mackey
(7
)
Executive Vice President, Chief Operating Officer -Marine and President - Mercury Marine Group
|
|
2007
2006
|
|
$
|
612,662
499,615
|
|
$
|
|
|
$
|
319,299
540,710
|
|
$
|
204,864
166,199
|
|
$
|
281,800
204,800
|
|
$
|
104,431
89,776
|
|
$
|
206,355
243,797
|
|
$
|
1,729,411
1,744,898
|
|
|
|
|
|
|
|
|
|
|
Peter G.
Leemputte
Senior Vice President and Chief Financial Officer
|
|
2007
2006
|
|
$
|
488,236
443,262
|
|
$
|
|
|
$
|
301,565
455,207
|
|
$
|
244,370
186,258
|
|
$
|
224,600
181,700
|
|
$
|
|
|
$
|
205,042
227,210
|
|
$
|
1,463,813
1,493,637
|
|
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|
|
|
|
|
|
|
|
John E.
Stransky
Vice President & President - Life Fitness
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|
2007
2006
|
|
$
|
309,501
240,771
|
|
$
|
|
|
$
|
69,090
195,655
|
|
$
|
84,766
42,178
|
|
$
|
394,400
259,409
|
|
$
|
104,840
92,847
|
|
$
|
52,804
27,728
|
|
$
|
1,015,401
858,587
|
|
|
|
|
|
|
|
|
|
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B. Russell
Lockridge
Vice President, Chief Human Resources Officer
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|
2007
2006
|
|
$
|
347,007
330,975
|
|
$
|
|
|
$
|
185,315
242,612
|
|
$
|
96,005
156,552
|
|
$
|
119,700
101,800
|
|
$
|
|
|
$
|
147,553
150,773
|
|
$
|
895,580
982,712
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|
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Peter B. Hamilton
(8
)
Vice Chairman and President - Brunswick Boat Group
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|
2007
2006
|
|
$
|
92,596
530,961
|
|
$
|
|
|
$
|
4,070
360,404
|
|
$
|
85,143
|
|
$
|
290,137
|
|
$
|
203,934
758,308
|
|
$
|
2,044,155
189,669
|
|
$
|
2,344,755
2,214,624
|
(1)
|
The amounts shown in this column constitute actual base salary earned. Annual salaries as of December 31, 2007 are:
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McCoy
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Mackey
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Leemputte
|
|
Stransky
|
|
Lockridge
|
$
|
906,000
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|
$
|
653,400
|
|
$
|
503,400
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|
$
|
319,000
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|
$
|
359,000
|
(2)
|
The amounts shown in this column constitute the accrued expense relating to restricted stock units (RSUs) and performance shares granted under the 2003 Stock Incentive Plan. Shares
are expensed pursuant to Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (FAS 123R). For assumptions used in the valuation of such awards, see Note 15 to the financial statements included in the
Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2007. For further information on these awards, see the Grants of Plan-Based Awards table.
|
(3)
|
The amounts shown in this column constitute the accrued expense of stock-settled stock appreciation rights (SARs) and non-qualified stock options granted under the 2003 Stock
Incentive Plan. For assumptions used in the valuation of such awards, see Note 15 to the financial statements included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2007. For further information on
these awards granted in 2007, see the Grants of Plan-Based Awards table.
|
(4)
|
The amounts shown in this column constitute payments made under the annual Brunswick Performance Plan (BPP) and mid-term Strategic Incentive Plan (SIP). Payments under these plans
for each of the NEOs are:
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McCoy
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Mackey
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Leemputte
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Stransky
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Lockridge
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BPP
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SIP
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BPP
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SIP
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|
BPP
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|
SIP
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|
BPP
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|
SIP
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|
BPP
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SIP
|
2007
|
|
$
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|
$
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483,600
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$
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$
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281,800
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|
$
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$
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224,600
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$
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278,300
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$
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116,100
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$
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$
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119,700
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2006
|
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$
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$
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328,000
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$
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$
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204,800
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$
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$
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181,700
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$
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161,209
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$
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98,200
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$
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|
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$
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101,800
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29
From these payments, the following amounts were deferred in February 2008 for 2007 payments and February 2007 for 2006
payments:
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McCoy
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Mackey
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Leemputte
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Stransky
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Lockridge
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BPP
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SIP
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BPP
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SIP
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|
BPP
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SIP
|
|
BPP
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|
SIP
|
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BPP
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SIP
|
2007
|
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$
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$
|
379,000
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$
|
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|
$
|
221,354
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
58,050
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
$
|
|
|
$
|
254.576
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
58,920
|
|
$
|
|
|
$
|
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(5)
|
The amounts shown in this column include:
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For Messrs. McCoy, Mackey and Hamilton, above-market interest paid on required automatic deferrals. Senior executives with compensation in excess of $1.5 million
that is not qualified under Section 162(m) of the Internal Revenue Code automatically have such excess compensation deferred. Deferred cash equivalent balances are credited with (i) an interest rate equal to the greater of the prime rate
at JP Morgan Chase plus 4 percent, or Brunswicks short-term borrowing rate or (ii) returns on securities selected by the officer. Interest earned on securities selected by the officer is a market rate of return and is therefore not
included in this column. Interest credited to deferred cash equivalent balances in excess of 120 percent of the IRS Applicable Federal Rate is as follows:
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McCoy
|
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Mackey
|
2007
|
|
$
|
121,257
|
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$
|
104,431
|
|
|
|
2006
|
|
$
|
94,034
|
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$
|
89,776
|
Beginning in 2008, the interest rate used to credit automatic deferrals will be reduced to the
prime rate at JP Morgan Chase plus 2 percent.
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The aggregate of the increase in actuarial values of benefits under Brunswicks Salaried Pension Plan and Supplemental Pension Plan is as follows:
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Stransky
|
2007
|
|
$
|
104,840
|
2006
|
|
$
|
92,847
|
(6)
|
The amounts shown in this column include the following:
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Defined Contribution Plan Contributions:
Brunswick contributions to defined contribution programs, including both qualified and non-qualified (to provide for contributions in excess of IRS limits), per the contribution formulas
detailed in the Narrative to Non-Qualified Deferred Compensation Table:
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|
|
McCoy
|
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Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
Qualified
|
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2007
|
|
$
|
9,700
|
|
$
|
12,777
|
|
$
|
15,600
|
|
$
|
3,881
|
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$
|
15,600
|
2006
|
|
$
|
13,229
|
|
$
|
16,546
|
|
$
|
19,110
|
|
$
|
3,083
|
|
$
|
16,431
|
Non-Qualified
|
|
|
|
|
|
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|
|
|
2007
|
|
$
|
109,186
|
|
$
|
71,507
|
|
$
|
61,391
|
|
$
|
162
|
|
$
|
33,444
|
2006
|
|
$
|
202,300
|
|
$
|
61,859
|
|
$
|
136,098
|
|
$
|
32
|
|
$
|
81,113
|
As noted in footnotes 5 and 8, only Messrs. Stransky and Hamilton have a defined benefit pension
benefit.
Financial Counseling:
This benefit has been eliminated effective January 1, 2008. Through 2007, Brunswick offered
financial counseling services, including tax preparation, to officers through The Ayco Company, L.P. Mr. McCoy has been reimbursed for financial counseling provided by a firm with which he has had an ongoing relationship. Prior to 2006,
Mr. Mackey had also received reimbursement for services outside the Ayco program. Mr. Mackeys 2006 fees include additional fees for his initiation into the program. The incremental cost to the Company attributable to these services
is based on the actual dollars reimbursed in the cases of Mr. McCoy, and for all others the actual contracted rate charged by The Ayco Company to perform these services and is as follows:
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|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
2007
|
|
$
|
18,000
|
|
$
|
7,550
|
|
$
|
9,060
|
|
$
|
|
|
$
|
9,060
|
|
|
|
|
|
|
2006
|
|
$
|
18,000
|
|
$
|
12,625
|
|
$
|
8,950
|
|
$
|
|
|
$
|
8,950
|
30
Product Program:
In 2005, Brunswick adopted a product program for officers. This program is
designed to encourage the use of Brunswick products to enhance understanding and appreciation of Brunswicks businesses and identify product and business enhancement opportunities. Officers who serve as directors, the Chief Financial Officer
and the Presidents of Mercury and the Boat Group are each eligible to select products with an aggregate annual value of up to $15,000. Other officers are each eligible to select products with an aggregate annual value of up to $10,000 annually.
Previously, unused amounts could be carried over to subsequent years, but were subject to forfeiture if not used by March 15, 2007. This carryover feature has since been removed from the program. The incremental cost of products selected, based
on dealer costs, and gross-ups for the payment of taxes in the current period, are as follows (Mr. McCoys 2006 and Messrs. Leemputte, Lockridge, and Stranskys 2007 cost totals include amounts carried over from previous years):
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McCoy
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Mackey
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Leemputte
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Stransky
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Lockridge
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Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
2007
|
|
$
|
6,569
|
|
$
|
4,280
|
|
$
|
11,608
|
|
$
|
8,829
|
|
$
|
17,040
|
|
$
|
11,102
|
|
$
|
20,485
|
|
$
|
13,346
|
|
$
|
28,827
|
|
$
|
18,782
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
$
|
25,265
|
|
$
|
16,461
|
|
$
|
|
|
$
|
|
|
$
|
11,187
|
|
$
|
7,288
|
|
$
|
5,818
|
|
$
|
3,791
|
|
$
|
1,712
|
|
$
|
764
|
Boat Program:
Brunswick encourages active participation in boating on the part of Company
officers. Boats made available to officers are used for marketing purposes, hosting of civic events, personal usage and to enhance product knowledge. The amounts reported are based on incremental cost to the Company, which consists of incremental
dealer discounts plus slip fees, fuel and other incidentals, such as cleaning and repairs. The incremental cost to the Company attributable to personal usage, and gross-ups for the payment of taxes in the current period, are as follows:
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|
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|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
2007
|
|
$
|
2,908
|
|
$
|
1,287
|
|
$
|
|
|
$
|
|
|
$
|
2,196
|
|
$
|
951
|
|
$
|
1,636
|
|
$
|
705
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
$
|
156,518
|
|
$
|
66,160
|
|
$
|
38,111
|
|
$
|
18,983
|
|
$
|
1,109
|
|
$
|
468
|
|
$
|
1,676
|
|
$
|
710
|
|
$
|
683
|
|
$
|
445
|
Personal Use of Company Aircraft:
The amounts reported are based on incremental cost to the
Company, which consists of an hourly cost of operating the aircraft, including fuel, maintenance and other variable costs such as meals, lodging and overtime for the crew and other incidentals, such as cleaning and repairs. The incremental cost to
the Company attributable to personal use of corporate aircraft, including travel to meetings of the boards of directors of other companies, and gross-ups for the payment of taxes in the current period, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
|
Cost
|
|
Gross-up
|
2007
|
|
$
|
114,591
|
|
$
|
27,722
|
|
$
|
10,386
|
|
$
|
5,518
|
|
$
|
46,355
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
594
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
$
|
108,298
|
|
$
|
18,915
|
|
$
|
24,210
|
|
$
|
3,573
|
|
$
|
16,120
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Relocation:
Mr. McCoys promotion to Chairman and Chief Executive Officer
resulted in his relocation from Knoxville, Tennessee to Lake Forest, Illinois. Brunswicks standard relocation policy would have provided Mr. McCoy with a three year cost of living allowance, paid annually, totaling $138,822 net of taxes.
This allowance is largely attributable to higher state taxes and housing costs in Illinois. In lieu of this allowance, a one time payment of $100,000 was made to Mr. McCoy in 2006. Additionally, direct costs related to his moving expenses
totaled $95,176 in 2006.
Life Insurance:
The Sarbanes-Oxley Act of 2002 prohibits loans to executive officers. This loan prohibition
combined with changes in taxation of split-dollar life insurance forced Brunswick to restructure existing split-dollar life insurance policies. Policies were restructured in 2004 such that the net present value cost to Brunswick did not increase.
Executives are now responsible for payment of annual premiums and keeping their policies current. Annual payments to executives related to premium payments are:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Lockridge
|
2007
|
|
$
|
38,865
|
|
$
|
65,776
|
|
$
|
25,159
|
|
$
|
29,172
|
|
|
|
|
|
2006
|
|
$
|
38,865
|
|
$
|
65,776
|
|
$
|
25,159
|
|
$
|
29,172
|
Policy Maturity Date
|
|
|
7/1/2014
|
|
|
1/1/2016
|
|
|
1/1/2022
|
|
|
7/1/2014
|
31
These individuals are not provided any life insurance through the Companys basic life insurance
program for employees.
Other Benefits:
Each of the NEOs also received the following perquisites and other personal benefits, none of
which exceeded $25,000 or 10 percent of the perquisites and other personal benefits for that NEO: (a) an annual executive physical examination, (b) 24/7 healthcare concierge service, (c) excess liability insurance, and (d) a
holiday gift. In addition, Mr. McCoy was provided with home security and he and Mr. Mackey received spousal travel benefits. The aggregate of gross-ups provided to each NEO in relation to these items is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
2007
|
|
$
|
1,508
|
|
$
|
2,278
|
|
$
|
2,188
|
|
$
|
2,188
|
|
$
|
1,830
|
|
|
|
|
|
|
2006
|
|
$
|
8,962
|
|
$
|
333
|
|
$
|
285
|
|
$
|
285
|
|
$
|
285
|
(7)
|
Mr. Mackey resigned from Brunswick effective March 1, 2008.
|
(8)
|
Mr. Hamilton left Brunswick on January 31, 2007. Items included in Mr. Hamiltons compensation are as follows:
|
Payments made under the annual BPP: $72,437 in 2006. Payment made under the SIP: $217,700 in 2006. The incremental cost to the Company for personal boat
usage and related taxes: $463 and $199, respectively, in 2006. The incremental cost to the Company attributable to financial planning services: $13,000 for 2006. The incremental cost to the Company for personal aircraft usage and related taxes:
$5,783 and $691, respectively, in 2006. Severance benefit as a result of Mr. Hamiltons departure from the Company: $1,848,805 in 2007. The incremental cost of products selected under the product program and related taxes: $33,151 and
$21,599, respectively, for 2007 and $8,464 and $5,515, respectively, for 2006. The tax gross-up on a holiday gift received prior to his departure: $322 for 2007 and $583 for 2006.
The accrued expense relating to RSUs granted under the 2003 Stock Incentive Plan: $4,070 for 2007 and $360,404 for 2006. The accrued expense relating to
SARs and non-qualified stock options granted under the 2003 Stock Incentive Plan: $85,143 for 2006. Brunswick contributions for qualified defined contribution programs: $3,578 for 2007 and $3,960 for 2006. Brunswick contributions for non-qualified
defined contribution programs: $4,082 for 2007 and $5,521 for 2006. Payments made for the purchase of additional life insurance: $130,935 for 2007 and $130,935 for 2006. Above market interest on required automatic deferrals: $59,923 for 2007 and
$285,895 for 2006. The aggregate of the increase in actuarial values of benefits under Brunswicks Salaried Pension Plan and Supplemental Pension Plan: $347,285 for 2007 and $472,413 for 2006.
32
2007 GRANTS OF PLAN-BASED AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
|
|
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant
Date
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock
or
Units
|
|
|
All Other
Option
Awards:
Number
of
Securities
Underlying
Options
|
|
|
Exercise or
Base
Price
of Option
Award
($/Sh)
|
|
Grant
Date Fair
Value
of
Stock and
Option
Awards
|
Dustan E. McCoy
|
|
1/1/2007
|
|
$
|
262,823
|
(1)
|
|
$
|
1,051,292
|
(1)
|
|
$
|
2,102,584
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/2007
|
|
$
|
271,800
|
(2)
|
|
$
|
1,087,200
|
(2)
|
|
$
|
2,174,400
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
(3)
|
|
$
|
33.00
|
|
$
|
5,940,000
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,500
|
(4)
|
|
26,000
|
(4)
|
|
33,800
|
(4)
|
|
|
|
|
|
|
|
|
|
|
$
|
858,000
|
Patrick C. Mackey
|
|
1/1/2007
|
|
$
|
153,166
|
(1)
|
|
$
|
612,662
|
(1)
|
|
$
|
1,225,324
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/2007
|
|
$
|
163,350
|
(2)
|
|
$
|
653,400
|
(2)
|
|
$
|
1,306,800
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,000
|
(3)
|
|
$
|
33.00
|
|
$
|
891,000
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,200
|
(5)
|
|
|
|
|
|
|
|
$
|
105,600
|
Peter G. Leemputte
|
|
1/1/2007
|
|
$
|
122,059
|
(1)
|
|
$
|
488,236
|
(1)
|
|
$
|
976,472
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/2007
|
|
$
|
125,850
|
(2)
|
|
$
|
503,400
|
(2)
|
|
$
|
1,006,800
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,000
|
(3)
|
|
$
|
33.00
|
|
$
|
891,000
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,200
|
(5)
|
|
|
|
|
|
|
|
$
|
105,600
|
John E. Stransky
|
|
1/1/2007
|
|
$
|
58,032
|
(1)
|
|
$
|
232,126
|
(1)
|
|
$
|
464,252
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/2007
|
|
$
|
59,813
|
(2)
|
|
$
|
239,250
|
(2)
|
|
$
|
478,500
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,000
|
(3)
|
|
$
|
33.00
|
|
$
|
528,000
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800
|
(5)
|
|
|
|
|
|
|
|
$
|
59,400
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
357
|
(6)
|
|
|
|
|
|
|
|
$
|
11,784
|
B. Russell Lockridge
|
|
1/1/2007
|
|
$
|
65,064
|
(1)
|
|
$
|
260,255
|
(1)
|
|
$
|
520,510
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/1/2007
|
|
$
|
67,313
|
(2)
|
|
$
|
269,250
|
(2)
|
|
$
|
538,500
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,000
|
(3)
|
|
$
|
33.00
|
|
$
|
528,000
|
|
|
2/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800
|
(5)
|
|
|
|
|
|
|
|
$
|
59,400
|
Peter B. Hamilton
|
|
1/1/2007
|
|
$
|
133,750
|
(1)
|
|
$
|
535,000
|
(1)
|
|
$
|
1,077,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Consists of opportunities under the 2007 Brunswick Performance Plan (BPP). Of the NEOs, only Messrs. Stransky and Hamilton earned amounts under this plan in 2007. The amount earned
is reported as Non-Equity Incentive Plan Compensation in the Summary Compensation Table.
|
(2)
|
Consists of opportunities under the Strategic Incentive Plan (SIP) with respect to a two-year performance period ending December 31, 2008. The value of the award is determined
at the end of the two-year performance period by measuring actual performance vs. established financial and strategic goals. As described in the Compensation Discussion and Analysis above, SIP was eliminated in 2008.
|
(3)
|
Consists of SARs awarded under the 2003 Stock Incentive Plan. Awards vest one-fourth on each of the first through fourth anniversaries of the grant date.
|
33
(4)
|
Consists of performance shares awarded under the 2003 Stock Incentive Plan. Performance shares convert to shares of Brunswick common stock at the end of a three-year performance
period. The final award is determined by multiplying 26,000 by the three-year average percent payout of the 2007, 2008 and 2009 corporate BPP, not to exceed 31,200 shares.
|
(5)
|
Consists of RSUs awarded under the 2003 Stock Incentive Plan as part of these executive officers annual compensation package. Awards vest in full on the third anniversary of
the grant date, subject to continued employment or in the event of a Change in Control.
|
(6)
|
Consists of RSUs awarded under the 2003 Stock Incentive Plan. This award represents a 20 percent premium credited to deferral of the cash portion of the 2005-2006 SIP incentive the
executive elected to defer in RSUs. Awards vest in full on the third anniversary of the grant date, subject to continued employment, or in the event of a Change in Control.
|
Narrative to Summary Compensation Table and Plan-Based Awards Table
Terms and Conditions of Employment
In January 2007, the Terms and Conditions of Employment for senior executives other than the Chairman and Chief Executive Officer were
modified to require a double trigger (effective termination of employment by the Company following a Change in Control of the Company) in order to receive termination benefits. This replaced the modified single trigger
(executive decision to terminate employment following a Change in Control of the Company) found in earlier agreements. In addition to incorporating a double trigger, agreements were revised to include all employment terms and conditions. The Terms
and Conditions of Employment confirm that employment is at will and outline the senior executives roles and responsibilities and the compensation and benefits provided in exchange for their services. Eligibility for certain perquisites is also
addressed.
The Terms and Conditions of Employment also contain provisions regarding termination of employment. Please see
Other
Potential Post-Employment Payments
for an additional discussion of the Terms and Conditions of Employment.
Awards
Grants of RSUs were made to all NEOs, other than Messrs. McCoy and Hamilton, in 2007 pursuant to the Brunswick 2003 Stock Incentive Plan. RSUs were used
for both annual grants and SIP deferral premiums, each vesting three years from the date of grant. The number of RSUs awarded under the annual grant and SIP deferral premium is as follows: Mr. Mackey, 3,200 units; Mr. Leemputte, 3,200
units; Mr. Stransky, 2,157 units, and Mr. Lockridge, 1,800 units. Dividend equivalencies are credited to RSUs during the vesting period.
A performance share grant of 26,000 shares was made in 2007 to Mr. McCoy. The number of performance shares earned is to be based on the average BPP payout percent for corporate headquarters employees for each of 2007, 2008 and 2009
multiplied by 26,000 (the target award level) to a maximum of 130 percent of target. The 2007 BPP payout was 0 percent.
Grants of SARs
were made to all NEOs, other than Mr. Hamilton, in 2007 pursuant to the Brunswick 2003 Stock Incentive Plan. SARs are granted annually and vest one-fourth on each of the first through fourth anniversaries of the grant date. The number of shares
represented by the SARs awarded under the annual grant is as follows: Mr. McCoy, 180,000 shares; Mr. Mackey, 27,000 shares; Mr. Leemputte, 27,000 shares; Mr. Stransky, 16,000 shares; and Mr. Lockridge, 16,000 shares.
In 2007, potential awards were granted to the NEOs, other than Mr. Hamilton, under the 2007-2008 SIP. Payout of SIP is contingent on
attainment of established financial and strategic goals at the end of the two-year performance period. For the 2007-2008 performance period, BVA and EPS comprise the financial goals. The strategic goals consist of initiatives tied to global growth,
cost control, product quality, distribution and employee satisfaction.
In 2007, potential awards were granted to the NEOs under the 2007
BPP. Payout of BPP is contingent on attainment of established financial goals. Messrs. McCoy, Mackey, Leemputte and Lockridge are on the corporate BPP. Their BPP measures were weighted 40 percent on EPS and 60 percent on BVA. Mr. Stransky was
on a division BPP in his role as President - Life Fitness. His BPP measures were weighted 100 percent on Life Fitness BVA. Awards earned under the 2007 BPP are reported in the Non-Equity Incentive Plan Compensation column of the Summary
Compensation Table.
34
2007 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
(1)
|
|
Stock Awards
(2)
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
Equity
Incentive Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
|
|
Option
Exercise
Price
|
|
Option
Expiration
Date
|
|
Number
of Shares
or Units of
Stock
Held
That
Have Not
Vested
|
|
Market
Value of
Shares or
Units
of
Stock
Held That
Have Not
Vested
|
|
Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have
Not
Vested
|
|
Equity Incentive
Plan Awards:
Market or
Payout Value
of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
|
Dustan E. McCoy
|
|
6,000
9,000
10,000
37,500
|
|
3,000
10,000
112,500
180,000
|
|
|
|
$
$
$
$
$
|
21.83
38.36
46.12
39.15
33.00
|
|
4/30/2013
2/18/2014
1/31/2015
2/14/2016
2/13/2017
|
|
1,708
26,303
4,596
|
|
$
$
$
|
29,123
448,470
78,368
|
|
8,666
22,533
|
|
$
$
|
147,755
384,188
|
Patrick C. Mackey
|
|
22,500
9,000
9,000
10,000
5,000
|
|
3,000
10,000
15,000
27,000
|
|
|
|
$
$
$
$
$
$
|
19.92
21.83
38.36
46.12
39.15
33.00
|
|
2/6/2011
4/30/2013
2/18/2014
1/31/2015
2/14/2016
2/13/2017
|
|
1,708
13,152
4,579
3,305
|
|
$
$
$
$
|
29,123
224,235
78,075
56,369
|
|
|
|
|
|
Peter G. Leemputte
|
|
3,500
3,750
6,000
10,000
5,000
|
|
3,000
10,000
15,000
27,000
|
|
|
|
$
$
$
$
$
$
|
21.83
26.55
38.36
46.12
39.15
33.00
|
|
4/30/2013
8/15/2013
2/18/2014
1/31/2015
2/14/2016
2/13/2017
|
|
1,708
2,315
3,578
15,782
3,305
374
444
|
|
$
$
$
$
$
$
$
|
29,123
39,465
60,999
269,082
56,359
6,385
7,568
|
|
|
|
|
|
John E. Stransky
|
|
7,500
7,000
1,500
1,125
7.500
3,750
|
|
375
7,500
11,250
16,000
|
|
|
|
$
$
$
$
$
$
$
|
19.92
24.51
21.83
38.36
46.12
39.15
33.00
|
|
2/6/2011
2/05/2012
4/30/2013
2/18/2014
1/31/2015
2/14/2016
2/13/2017
|
|
1,281
1,736
1,859
|
|
$
$
$
|
21,842
29,599
31,702
|
|
|
|
|
|
B. Russell Lockridge
|
|
3.500
5,250
6,000
3,000
|
|
1,750
6,000
9,000
16,000
|
|
|
|
$
$
$
$
$
|
21.83
38.36
46.12
39.15
33.00
|
|
4/30/2013
2/18/2014
1/31/2015
2/14/2016
2/13/2017
|
|
1,068
1,368
2,063
10,521
1,859
|
|
$
$
$
$
$
|
18,202
23,320
35,174
179,388
31,702
|
|
|
|
|
|
Peter B. Hamilton
|
|
40,000
45,000
90,000
12,000
12,000
7,500
|
|
7,500
|
|
|
|
$
$
$
$
$
$
|
22.875
18.875
19.92
21.83
38.36
46.12
|
|
4/21/2009
7/26/2010
2/6/2011
4/30/2013
2/18/2014
1/31/2015
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Options vest at a rate of 25 percent per year over the first four years of the 10-year option term. For example, with respect to Mr. McCoys grant of 6,000 options with an
expiration date of 4/30/2013, 1,500 shares vested on 4/30/2003, 1,500 shares vested on 4/30/2004, 1,500 shares vested on 4/30/2005 and 1,500 shares vested on 4/30/2006.
|
(2)
|
Annual RSU grants and RSUs awarded under the annual SIP premium vest three years from date of grant. Retention RSUs awarded in 2006 vest 100 percent at the end of four years from
the date of grant. For vesting of the performance share grant awarded to Mr. McCoy, see the discussion of performance shares under Compensation Element in the Compensation Discussion and Analysis.
|
35
2007 OPTION EXERCISES AND STOCK VESTED
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
(1,2,3)
|
Name
|
|
Number of Shares
Acquired On
Exercise
|
|
Value Realized on
Exercise
|
|
Number of Shares
Acquired
on Vesting
|
|
Value Realized
on Vesting
|
Dustan E. McCoy
|
|
|
|
$
|
|
|
21,540
|
|
$
|
700,862
|
Patrick C. Mackey
|
|
|
|
$
|
|
|
17,768
|
|
$
|
585,713
|
Peter G. Leemputte
|
|
|
|
$
|
|
|
15,327
|
|
$
|
509,735
|
John E. Stransky
|
|
5,000
|
|
$
|
10,216
|
|
2,686
|
|
$
|
85,033
|
B. Russell Lockridge
|
|
|
|
$
|
|
|
7,262
|
|
$
|
243,018
|
Peter B. Hamilton
|
|
30,000
|
|
$
|
400,788
|
|
15,366
|
|
$
|
524,027
|
(1)
|
Includes the following number of vested RSUs awarded under the annual SIP premium deferred on February 18, 2004, and vesting on January 12, 2007, using a market price of
$30.52/share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
|
Hamilton
|
|
|
|
|
|
|
|
1,064
|
|
|
|
|
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
32,473
|
|
$
|
|
|
$
|
|
|
$
|
|
(2)
|
Includes the following number of vested RSUs awarded on February 14, 2004, and vesting on February 14, 2007, using a market price of $33.62/share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
|
Hamilton
|
|
2,190
|
|
|
2,181
|
|
|
1,704
|
|
|
|
|
|
983
|
|
|
|
$
|
73,628
|
|
$
|
73,325
|
|
$
|
57,288
|
|
$
|
|
|
$
|
33,048
|
|
$
|
|
(3)
|
Includes the following number of vested RSUs awarded under the annual SIP premium vesting because age and years of service equal 65 using a market price of $30.52/share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
|
Hamilton
|
|
6,791
|
|
|
3,028
|
|
|
|
|
|
1,639
|
|
|
|
|
|
|
$
|
207,261
|
|
$
|
92,415
|
|
$
|
|
|
$
|
50,022
|
|
$
|
|
|
$
|
|
2007 PENSION BENEFITS
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number of Years
Credited
Service
(1)
|
|
Present Value of
Accumulated
Benefit
|
|
Payments During Last
Fiscal Year
|
John E. Stransky
|
|
Salaried Pension Plan
|
|
18.92
|
|
$
|
471,381
|
|
$
|
|
|
|
|
|
|
|
|
Supplemental Salaried Pension Plan
|
|
18.92
|
|
$
|
499,954
|
|
$
|
|
|
|
|
|
|
Peter B. Hamilton
|
|
Salaried Pension Plan
|
|
11.17
|
|
$
|
1,021,705
|
|
$
|
80,752
|
|
|
|
|
|
|
|
Supplemental Salaried Pension Plan
|
|
23.67
|
|
$
|
3,524,332
|
|
$
|
278,551
|
(1)
|
Under an agreement with Brunswick, Mr. Hamiltons years of service credited under the Supplemental Salaried Pension Plan include credit for 12.5 years of service with a
previous employer. Mr. Hamiltons pension under this plan will be reduced by the pension he receives from that employer. The values shown in the above table include this reduction.
|
36
Narrative to Pension Benefits Table
Messrs. Stransky and Hamilton are the only NEOs who participate in Brunswicks pension plans. The Salaried Pension Plan is a non-contributory plan providing for benefits following retirement under a formula based
upon age, years of participation in the plans up to 30 years and the average of the three highest consecutive years earnings (salaries, annual BPP and commissions, but excluding payouts under the SIP). Participation in the salaried pension
plan is frozen, with no new participants being added after April 1, 1999.
Assumptions used in determining the present value of
accumulated benefit are the following:
|
|
|
Pre- and Post-Retirement Mortality according to the RP2000 Generational Combined White-Collar Adjustment Table for annuity benefits
|
|
|
|
6.5 percent discount rate for annuity benefits
|
The Company also maintains a supplemental pension plan pursuant to which benefits are equal to the benefits that would have been payable to the participant under the Salaried Pension Plan but for the limitations
imposed on such benefits by sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended.
NON-QUALIFIED DEFERRED
COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Last FY
(1)
|
|
Company
Contributions
in Last FY
|
|
Aggregate
Earnings in
Last FY
(2)
|
|
|
Aggregate
Withdrawals /
Distributions
|
|
Aggregate
Balance at
Last
FYE
(3)
|
Dustan E. McCoy
|
|
$
|
479,891
|
|
$
|
109,186
|
|
$
|
(460,401
|
)
|
|
$
|
|
|
$
|
5,474,487
|
Patrick C. Mackey
|
|
$
|
147,992
|
|
$
|
71,507
|
|
$
|
(14,892
|
)
|
|
$
|
|
|
$
|
6,291,971
|
Peter G. Leemputte
|
|
$
|
22,247
|
|
$
|
61,391
|
|
$
|
(178,048
|
)
|
|
$
|
|
|
$
|
1,779,118
|
John E. Stransky
|
|
$
|
58,920
|
|
$
|
11,946
|
|
$
|
(205,271
|
)
|
|
$
|
|
|
$
|
553,452
|
B. Russell Lockridge
|
|
$
|
13,428
|
|
$
|
33,444
|
|
$
|
(313,718
|
)
|
|
$
|
|
|
$
|
1,433,592
|
Peter B. Hamilton
|
|
$
|
|
|
$
|
4,082
|
|
$
|
129,701
|
|
|
$
|
5,222,212
|
|
$
|
|
(1)
|
100 percent of the amount for each NEO in this column is reported in the Summary Compensation Table.
|
(2)
|
Amounts in this column include above-market interest reported for 2007 in the Change in Pension Value and Non-qualified Deferred Compensation Earnings column of the
Summary Compensation Table.
|
(3)
|
Of Messrs. McCoy and Mackeys balances, $94,034 and $89,776 were reported as earnings in the Summary Compensation Table for the 2006 Proxy Statement.
|
Narrative to Non-Qualified Deferred Compensation Table
The Non-Qualified Deferred Compensation table presents amounts deferred in 2007 under the Elective Incentive Deferred Compensation, Restoration (non-qualified plan to provide for contributions in excess of IRS limits) and Automatic Deferred
Compensation plans plus effect of previous deferrals.
Under the Elective Incentive Deferred Compensation Plan, participants may defer up
to 100 percent of BPP and SIP awards. Deferrals may be made as cash or stock. Cash deferrals are credited with earnings and losses based on the rate of return of mutual funds selected by the executive. The investment options mirror those of the
qualified 401(k) plan and are managed by the participant in the same manner. Stock deferrals are valued on the same bases as Brunswick common stock and are credited with a 20 percent premium with a three-year vesting period.
Under the Restoration Plan, participants may defer up to 40 percent of their base salary, BPP and SIP. Deferrals are credited with earnings and losses
based on the rate of return of mutual funds selected by the executive. The investment options mirror those of the qualified 401(k) plan and are managed by the participant in the same manner. Brunswick contributes to this plan according to the
following formulas:
Rewards Plan Participants
(Messrs. McCoy, Mackey, Leemputte and Lockridge): One dollar for every dollar
contributed by the employee, up to 3 percent of annual pay, and 50 cents for every dollar on the next 2 percent, plus an annual 3 percent profit sharing contribution and a variable profit sharing contribution up to 6 percent based on company
performance.
37
Brunswick Retirement Savings Plan Participants
(Messrs. Stransky and Hamilton): 5 percent of
employee contributions, up to 6 percent of annual pay, plus an annual discretionary contribution of up to 25 percent of employee contributions as determined by the board of directors.
The rate of return in 2007 for each fund and the NEOs who selected those funds in the Elective Incentive Deferred Compensation Plan and the Restoration Plan are indicated in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Rate of Return
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Lockridge
|
|
Stransky
|
|
Hamilton
|
Brunswick Short Term Bond
|
|
5.94
|
%
|
|
X
|
|
X
|
|
X
|
|
X
|
|
X
|
|
|
Vanguard Total Bond Market Index
|
|
6.92
|
%
|
|
|
|
X
|
|
X
|
|
|
|
X
|
|
|
Vanguard Wellington
|
|
8.34
|
%
|
|
|
|
|
|
|
|
|
|
X
|
|
|
Royce Premier
|
|
9.41
|
%
|
|
|
|
|
|
|
|
X
|
|
|
|
|
Vanguard 500 Index
|
|
5.39
|
%
|
|
|
|
X
|
|
X
|
|
|
|
X
|
|
|
Vanguard Morgan Growth
|
|
11.22
|
%
|
|
|
|
|
|
|
|
X
|
|
X
|
|
|
Vanguard Windsor II
|
|
2.23
|
%
|
|
|
|
|
|
X
|
|
|
|
X
|
|
|
Vanguard Total Intl Stock Index
|
|
15.52
|
%
|
|
|
|
X
|
|
|
|
X
|
|
X
|
|
X
|
Brunswick ESOP Company Stock
|
|
-44.81
|
%
|
|
|
|
X
|
|
|
|
|
|
|
|
|
Vanguard Prime Money Market Fund
|
|
5.14
|
%
|
|
|
|
|
|
|
|
|
|
X
|
|
|
Vanguard Target Retirement Income
|
|
8.17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard Target Retirement 2005
|
|
8.12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard Target Retirement 2015
|
|
7.55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard Target Retirement 2025
|
|
7.59
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard Target Retirement 2035
|
|
7.49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard Target Retirement 2045
|
|
7.47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Under the Automatic Deferred Compensation Plan, participants are required to defer annual earnings
in excess of $1.5 million to protect the tax deductibility to the Company of such compensation under Section 162(m) of the Internal Revenue Code. Deferred cash equivalent balances are credited with (i) an interest rate equal to the greater
of the prime rate at JP Morgan Chase plus 4 percent, or Brunswicks short-term borrowing rate or (ii) returns on securities selected by the executive. If the executive has an election in place to defer their SIP into stock, automatic
deferrals are deferred as stock and are credited with a 20 percent premium with a three-year vesting period.
Distributions of cash
deferrals are made six months post termination. Stock deferrals may be distributed upon vesting of the 20 percent premium, depending on the distribution selection made at the time of the deferral election.
Other Potential Post-Employment Payments
Brunswick
has entered into severance and Change in Control agreements with certain of its senior executives, including each of the NEOs, incorporated in the Terms and Conditions of Employment.
38
Agreements
Under an agreement with Brunswick dated September 18, 2006, Mr. McCoy is entitled to certain severance benefits if his employment is terminated by Brunswick other than for cause or disability. The agreement defines termination to
include resignation by Mr. McCoy for Good Reason, including a Change in Control of Brunswick or other substantial changes in the terms and conditions of Mr. McCoys employment.
If a termination covered by the agreement occurs prior to a Change in Control, Mr. McCoy is entitled to a severance payment equal to two times the
sum of (i) annual salary, (ii) targeted annual award under the BPP, and (iii) the Companys profit-sharing, 401(k) match and other Company contributions made on his behalf to the Companys tax-qualified and non-qualified
defined contribution plans during the 12-month period prior to the date of termination. If the termination occurs after a Change in Control, Mr. McCoy is entitled to a severance payment equal to three times the sum of (i) annual salary,
(ii) the larger of targeted annual BPP award for the year of termination or the year in which the Change in Control occurs, (iii) the most recent full-cycle target award under SIP, and (iv) the Companys profit sharing, 401(k)
match and other Company contributions made on his behalf to the Companys tax-qualified and non-qualified defined contribution plans during the 12-month period prior to the date of termination. In addition to these severance payments,
Mr. McCoy would be entitled to receive: any annual BPP award earned for the preceding year that had not yet been paid at the time of termination; and medical, dental, vision, and prescription coverage for up to two years (three years if there
is a Change in Control). If termination occurs following a Change in Control, Mr. McCoy is entitled to a full gross-up for any excise tax on excess payments which exceed 110 percent of the safe harbor limit. In addition, Mr. McCoy would
fully vest in all outstanding stock options, stock appreciation rights, performance shares and restricted stock unit awards.
The
definition of Change in Control includes: (i) the acquisition of 25 percent or more of the outstanding voting stock of Brunswick by any person other than an employee benefit plan of Brunswick; (ii) the failure of the incumbent Board of
Directors to constitute a majority of Brunswicks Board of Directors, excluding new directors who (a) are approved by a vote of at least 50 percent of the members of the incumbent Board of Directors and (b) did not join the Board
following a contested election of directors; (iii) a merger of Brunswick with another corporation, other than a merger in which Brunswicks shareholders receive at least 60 percent of the voting stock outstanding after the merger or a
merger effected to implement a recapitalization of Brunswick in which no person acquires more than 25 percent of Brunswicks voting stock and the Board of Directors is comprised of a majority incumbent directors; or (iv) a complete
liquidation or dissolution of Brunswick or sale of substantially all of Brunswicks assets.
The terms of the agreement require
Mr. McCoy to consent to certain confidentiality, non-competition and non-solicitation provisions, and to execute a general release.
Brunswicks other NEOs are entitled to severance and Change in Control benefits substantially similar to those described above for Mr. McCoy, except that after a Change in Control, benefits are paid only upon effective
termination, and in the case of effective termination prior to a Change in Control, the multiplier used to determine severance benefits is one and one-half times (1.5x), and payout under the BPP is at the discretion of the Chairman and Chief
Executive Officer.
The terms of the agreement require the other NEOs to consent to certain confidentiality, non-competition and
non-solicitation provisions, and to execute a general release.
Payment Obligations Under Termination Scenarios
The following table indicates the Companys payment obligations resulting from effective termination before and after a Change in Control. For
purposes of the estimated payments following the table, a December 31, 2007 termination date is assumed.
39
|
|
|
|
|
|
|
|
|
Termination
prior to
Change in
Control
(1)
|
|
|
Termination
after
Change in
Control
(1)
|
|
Payment equal to multiple of Base Salary, BPP and Defined Contribution plan contributions
|
|
X
|
(2)
|
|
X
|
(3)
|
Payment equal to multiple of SIP
|
|
|
|
|
X
|
(4)
|
Stock Options/SARs
|
|
|
|
|
X
|
(5)
|
RSUs
|
|
|
|
|
X
|
(6)
|
Performance Shares
|
|
|
|
|
X
|
(6)
|
Benefits
(7)
|
|
X
|
|
|
X
|
|
(1)
|
Other than for cause or due to voluntary resignation without good reason.
|
(2)
|
Payment is two times the sum of salary, target BPP and defined contribution plan contributions for Mr. McCoy and one and one-half times the salary, target BPP (at the
discretion of the Chairman and Chief Executive Officer) and defined contribution plan contributions for the other NEOs. The amounts payable to each NEO are:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
$
|
4,224,172
|
|
$
|
1,106,526
|
|
$
|
870,587
|
|
$
|
484,712
|
|
$
|
612,066
|
Payment of BPP for NEOs other than Mr. McCoy is at the discretion of the Chairman and Chief
Executive Officer and would represent the following amounts if paid at target:
|
|
|
|
|
|
|
|
|
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
$
|
653,400
|
|
$
|
503,400
|
|
$
|
239,250
|
|
$
|
269,250
|
(3)
|
Payment multiple is three times for all NEOs. The amounts payable to each NEO would be the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
$
|
6,336,258
|
|
$
|
4,173,252
|
|
$
|
3,251,374
|
|
$
|
1,687,174
|
|
$
|
2,031,882
|
(4)
|
Payment multiple is three times for all NEOs. The amounts payable to each NEO would be the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
$
|
3,261,600
|
|
$
|
1,960,200
|
|
$
|
1,510,200
|
|
$
|
717,750
|
|
$
|
807,750
|
(5)
|
All unvested stock options/SARs immediately vest upon a Change in Control, regardless of whether the NEO terminates employment. The values of each NEOs unvested holdings as of
December 31, 2007, using a market price of $17.05/share are the following:
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(6)
|
All unvested RSUs immediately vest upon a Change in Control, regardless of whether the NEO terminates employment. Mr. McCoys Performance Shares immediately vest at
maximum (130% of target) performance. The values of each NEOs unvested holdings as of December 31, 2007, using a market price of $17.05/share are the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
$
|
1,556,631
|
|
$
|
374,230
|
|
$
|
439,583
|
|
$
|
83,136
|
|
$
|
278,068
|
(7)
|
Each of the NEOs is entitled to Company-provided continuation of benefits for the NEOs and eligible dependents, on substantially the same terms of such coverage that are in
existence immediately prior to the NEOs date of termination, until the earlier of: (A) the date on which the NEO becomes employed by another employer, or (B) the end of the NEOs severance period (which is 24 months for the
Chairman and Chief Executive Officer and 18 months for the other NEOs in the case of termination prior to a Change in Control, and 36 months for all NEOs in the case of termination following a Change in Control); provided, however, that such
coverage shall run concurrently with any coverage available to the NEO and eligible dependents under COBRA; and provided further, however, that the NEO shall immediately notify the Company if he becomes covered under Medicare or another
employers group health plan, at which time the Companys provision of medical coverage for the NEO and eligible dependents at the subsidized rate will cease.
|
40
The estimated present value of these benefits provided during the severance period, based on current
COBRA rates, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCoy
|
|
Mackey
|
|
Leemputte
|
|
Stransky
|
|
Lockridge
|
Severance
|
|
$
|
16,572
|
|
$
|
15,823
|
|
$
|
20,535
|
|
$
|
20,535
|
|
$
|
16,020
|
Change in Control
|
|
$
|
24,857
|
|
$
|
31,645
|
|
$
|
41,071
|
|
$
|
41,071
|
|
$
|
32,039
|
As a defined benefit plan participant, Mr. Stransky receives additional credited years of
service for 18 months in the case of severance and 36 months in the case of a Change in Control. The estimated present value of Mr. Stranskys additional pension benefit is as follows:
|
|
|
|
|
|
Stransky
|
Severance
|
|
$
|
228,078
|
Change in Control
|
|
$
|
474,816
|
If any element of compensation or benefit provided to any NEO as a result of a Change in Control
constitutes an excess parachute payment and subjects such NEO to the excise tax pursuant to Section 4999 of the Code, then the payment shall be grossed up to cover the excise tax and any additional income tax attributable to the
excise tax gross-up. If it is determined that the aggregate amount of the payment that would be payable to the NEO does not exceed 110 percent of the safe harbor limit (amount that could be paid to the NEO without giving rise to any liability for
excise taxes) no excise tax gross-up shall be made, and the payment to the NEO shall be reduced to the largest amount which would not cause any excise taxes to be payable by the NEO.
Had a termination occurred on December 31, 2007, following a Change in Control, the following additional gross-up payments would be required:
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McCoy
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Mackey
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Leemputte
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Stransky
|
|
Lockridge
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$
|
4,309,674
|
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$
|
2,548,138
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$
|
1,730,287
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$
|
1,139,784
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$
|
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DIRECTOR COMPENSATION
Director Compensation Table
The table below summarizes the Compensation paid by the Company to
non-employee directors for the fiscal year ended December 31, 2007.
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Name
(1)
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|
Fees
Earned or
Paid in
Cash
(2)
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Stock
Awards
(3)
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|
Option
Awards
(4)
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Non-Equity
Incentive Plan
Compensation
(5)
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Change in
Pension Value
and Non-qualified
Deferred
Compensation
Earnings
(6)
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All Other
Compensation
(7)
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Total
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Nolan D. Archibald
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$
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103,756
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$
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43,341
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|
|
|
|
|
|
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$
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27,768
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|
$
|
174,865
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Jeffrey L. Bleustein
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|
$
|
107,500
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|
$
|
33,000
|
|
|
|
|
|
|
|
$
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4,158
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$
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144,658
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Michael J. Callahan
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$
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113,740
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$
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33,000
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|
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$
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2,306
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$
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149,046
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Cambria W. Dunaway
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$
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99,990
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$
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33,000
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$
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19,509
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$
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152,499
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Manuel A. Fernandez
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$
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119,983
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$
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44,997
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$
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25,238
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$
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190,218
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Peter Harf
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$
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44,766
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$
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37,496
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$
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647
|
|
$
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82,909
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Graham H. Phillips
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$
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103,738
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|
$
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33,000
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|
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$
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14,750
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$
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151,488
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Roger W. Schipke
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$
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53,746
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$
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33,000
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$
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22,993
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$
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109,739
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Ralph B. Stayer
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$
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110,010
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$
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43,999
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$
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25,369
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$
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179,378
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J. Steven Whisler
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$
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$
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10,320
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$
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849
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$
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11,169
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Lawrence A. Zimmerman
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$
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119,983
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$
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44,997
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$
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18,593
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$
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183,573
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(1)
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Dustan E. McCoy, the Companys Chairman and Chief Executive Officer, and Peter B. Hamilton, the Companys former Vice Chairman and President Brunswick Boat Group,
are not included as they were employees of the Company and received no additional compensation for their service as directors. The compensation received by Messrs. McCoy and Hamilton as employees of the Company is shown in the Summary Compensation
Table above.
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41
(2)
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Amounts in this column reflect 2007 annual fees earned by each non-employee director. The following table shows the amount of fees that each director elected to receive in the form
of Common Stock rather than cash. As explained further below, directors may elect to take their cash fees in the form of currently distributable Common Stock (at market value) or deferred Common Stock (with a 20 percent premium).
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Name
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Fees Paid in Common Stock
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Nolan D. Archibald
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$
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103,756
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Jeffrey L. Bleustein
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$
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53,750
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Michael J. Callahan
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$
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56,865
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Cambria W. Dunaway
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$
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49,990
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Manuel A. Fernandez
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$
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119,983
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Peter Harf
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$
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44,766
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Graham H. Phillips
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$
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51,863
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Roger W. Schipke
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$
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26,871
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Ralph B. Stayer
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$
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110,010
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J. Steven Whisler
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Lawrence A. Zimmerman
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$
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119,983
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(3)
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This column represents the dollar amount recognized for financial statement reporting purposes with respect to the 2007 fiscal year in accordance with FAS 123R. Amounts in this
column include both the 2007 annual RSU grants and, for directors who have elected to receive a portion of their fee in deferred Common Stock, the portion of any such grant of deferred Common Stock that is attributable to the 20 percent premium that
is applied in determining the size of all such grants. For assumptions used in the valuation of such awards, see Note 15 to the financial statements included in the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2007. The grant date fair value of awards in this column is as follows:
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Name
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Grant Date
Fair Value of
2007 Annual
RSU Grant
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Grant Date
Fair Values of
Shares
Attributable to
20% Premium
Applied to
Deferral
of
Fees
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Nolan D. Archibald
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$
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33,000
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$
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10,341
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Jeffrey L. Bleustein
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$
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33,000
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Michael J. Callahan
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$
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33,000
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Cambria W. Dunaway
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$
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33,000
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Manuel A. Fernandez
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$
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33,000
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$
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11,997
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Peter Harf
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$
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33,000
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$
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4,496
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Graham H. Phillips
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$
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33,000
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Roger W. Schipke
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$
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33,000
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Ralph B. Stayer
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$
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33,000
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$
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10,999
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J. Steven Whisler
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$
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10,320
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|
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Lawrence A. Zimmerman
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$
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33,000
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$
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11,997
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The following table discloses certain additional information with respect to stock awards to non-employee
directors:
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Name
|
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Aggregate Number of
Stock Awards
Outstanding at
December 31, 2007
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Nolan D. Archibald
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3,153
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Jeffrey L. Bleustein
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3,153
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Michael J. Callahan
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3,153
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Cambria W. Dunaway
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1,559
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Manuel A. Fernandez
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3,153
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Peter Harf
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Graham H. Phillips
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3,153
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Roger W. Schipke
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Ralph B. Stayer
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3,153
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J. Steven Whisler
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516
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Lawrence A. Zimmerman
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2,348
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42
(4)
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This column is not applicable because non-employee directors do not receive options.
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(5)
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This column is not applicable because non-employee directors do not participate in any non-equity incentive plans.
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(6)
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This column is not applicable because non-employee directors do not participate in any defined benefit or actuarial pension plans (including supplemental plans) or receive any
dividends on deferred compensation.
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(7)
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The amounts shown in this column include the value of the following perquisites and benefits provided to directors:
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Product Program:
The incremental cost to Brunswick of products provided during the current year, and gross-ups for taxes incurred in prior periods
and paid in the current year, are as follows:
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Name
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Product Cost
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Gross-up
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Nolan D. Archibald
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$
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13,997
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$
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8,174
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Jeffrey L. Bleustein
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$
|
2,825
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Michael J. Callahan
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|
|
|
|
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Manuel A. Fernandez
|
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$
|
11,762
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|
$
|
2,824
|
Peter Harf
|
|
|
|
|
|
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Graham H. Phillips
|
|
$
|
1,645
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$
|
11,541
|
Roger W. Schipke
|
|
$
|
14,991
|
|
$
|
5,873
|
Ralph B. Stayer
|
|
$
|
10,816
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|
$
|
9,227
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Lawrence A. Zimmerman
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$
|
10,267
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$
|
6,886
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Other Perquisites and Benefits:
In addition to the availability of the product program
described above, each director received a holiday gift from the Company valued at $849
.
In addition, Ms. Dunaway and Messrs. Archibald, Fernandez and Stayer took advantage of Brunswicks boat leasing program for directors that
allowed them to lease boats without additional charges during 2007. Brunswick paid life insurance premiums for Messrs. Callahan and Shipke under a former group insurance policy and paid a medical claim for Mr. Shipke under a former policy.
Narrative to Director Compensation Table
Annual Fee and Deferred Stock Awards.
Directors who are not employees are entitled to an annual fee of $100,000. The presiding director and the director who is the chair of the Audit Committee are entitled to an additional fee of
$20,000 each, and the other members of the Audit Committee are entitled to an additional fee of $10,000 due to the increased time commitment required of those directors. The director who chairs the Human Resources and Compensation Committee also is
entitled to an additional annual fee of $10,000. The directors who chair the Finance and Nominating and Corporate Governance Committees are entitled to an additional annual fee of $7,500 each. Each director who serves on more than one committee is
entitled to an additional annual fee of $7,500, unless the director already receives additional fees for serving on both committees. One-half of each directors annual fee, including additional annual fees, is paid in Brunswick Common Stock,
the number of shares of which is determined by the closing price of Brunswick Common Stock on the date of the award. The receipt of these shares may be deferred until a director retires from the Board. Each director may elect to have the remaining
one-half paid as follows:
43
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|
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In Brunswick Common Stock distributed currently; or
|
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|
|
In deferred Brunswick Common Stock with a 20 percent premium.
|
For directors who elect to receive deferred Brunswick Common Stock, the number of shares to be received upon retirement is determined by multiplying the cash amount by 1.2, then dividing that amount by the closing
price of Brunswick Common Stock on the date of award.
Each non-employee director is also entitled to an annual grant, on the date of the
Annual Meeting, of 1,000 Restricted Stock Units (RSUs), deferred until the director retires from the Board. A director joining the Board during the course of a year is entitled to a pro rata number of RSUs. For purposes of calculating a pro rata RSU
grant, a director begins to receive credit for serving on the Board in the first calendar quarter that commences after the date on which the director joined the Board.
Stock Ownership Guidelines.
In February 2003, the Board of Directors adopted stock ownership guidelines for non-employee directors. By April 30, 2006, each non-employee director who was a director as of
February 2003 must have owned at least 10,000 shares of Brunswick Common Stock, and by April 30, 2008, each non-employee director who was a director as of February 2003 must own at least 20,000 shares of Brunswick Common Stock. A new
non-employee director will be expected to meet these levels of stock ownership within three and five years, respectively, of the date on which service as a director begins. For the purpose of satisfying the guidelines, deferred stock awards are
included.
Brunswick Product Program.
Directors are encouraged to use Brunswick products to enhance their understanding and
appreciation of Brunswicks business. Directors may receive Brunswick products with an aggregate value of up to $15,000 annually. The value of the products is included in the directors taxable income, and Brunswick reimburses directors
for applicable tax liability associated with the receipt of products. In addition, directors may lease boats from Brunswick at no charge except for the payment of applicable taxes, and all or a portion of a directors $15,000 product allowance
may be applied to defray those taxes. Directors also may purchase Brunswick products at reduced prices.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Brunswicks directors, executive officers and any
persons who own more than 10 percent of Brunswick Common Stock to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission. Based on a review of the copies of such forms furnished to the
Company and written representations from the Companys directors and executive officers, the Company believes that all forms were filed in a timely manner during 2007.